Government-sponsored mortgage behemoths Fannie Mae and Freddie Mac are pulling the plug on their relationship with the law offices of David J. Stern, a sketchy foreclosure processing enterprise.
The Wall Street Journal reports:
Freddie Mac took the rare step of removing loan files after an internal review raised “concerns about some of the practices at the Stern firm,” a Freddie spokeswoman said.
“We have begun taking possessions of all files on Freddie Mac mortgages simply to protect our interest in those loans as well as those of the borrowers,” the Freddie spokeswoman said. A Fannie spokeswoman declined to elaborate.
Florida Attorney General Bill McCollum has been investigating the law firm, whose foreclosure processes have wrought for its namesake attorney a Bugatti, a yacht and other fancy things. Amid reports of fraud and forgery in the Florida foreclosure document industry, Citigroup has stopped sending paperwork toward the Stern law offices. Citing people familiar with the matter, The Journal says Freddie Mac has charged the Stern business with handling around 10,000 foreclosure documents.
mtaylor [at] observer.com | @mbrookstaylor